Paul
Wolfowitz pledges annual assistance of $1.5 billion to Pakistan for
the next three years

From SHAMIM AHMED RIZVI,
IslamabadAug 22 - 28, 2005

Appreciating the economic reforms and the high
growth rate achieved by Pakistan, World Bank President Paul Wolfowitz
has advised the economic managers of Pakistan to maintain the present
momentum. "High growth rate is part of what needs to be done and
if Pakistan can sustain it, Pakistan can achieve what China and India
have gained economically," he said.

Talking to newsmen in Islamabad on the conclusion
of his visit to Pakistan, the World Bank chief observed that
Pakistan's over 8 percent economic growth was quite impressive but its
sustainability and equitable distribution of benefits to the poor was
the real challenge. Earlier, after his meeting with Prime Minister
Shaukat Aziz, the World Bank President had pledged annual assistance
of $1.5 billion to Pakistan for the next three years for its various
sectors of economy including water, power, energy and infrastructure.
The visiting World Bank delegation led by its President also agreed to
help Pakistan in recovering looted money.

Paul Wolfowitz was on his first visit to South
Asia. He flew into Islamabad late on Sunday, and would also visit
neighbouring India and Bangladesh. The former Deputy US Defence
Secretary, who took over from James D. Wolfesohn in June, praised
Pakistan's recent economic reforms for showing "real
discipline".

In his arrival statement, the World Bank President
appreciated the reforms programme and determination of the Pakistan
government and assured all out support for its reforms programme. He
said this is his first visit to South Asian region as President of the
Bank and wished Independence Day greetings to the government and
people of Pakistan. " I am delighted to be able to visit Pakistan
very early in my tenure, and to be able to discuss how the World Bank
can support the progress of this important country," he remarked.
He added that Pakistan set itself on a course of economic reforms
about five years ago. "It has sustained this course with real
discipline and real results," he remarked. The World Bank
President said: "I am eager to learn more and to see first hand
how these reforms are beginning to make difference for Pakistan's
poorest citizens- most especially Pakistani women and girls". He
added that he had heard particularly about gains in education, and
that girls are attending schools in grater numbers.

"But even with these early successes, the
challenges are huge. I am here to see what the World Bank is offering
is very best support. And my question will be: how can we better
it," he remarked. "Pakistan has shown a real determination
in its economic reform program; sustaining this effort, investing in
infrastructure for the future, and in services for the poor across the
nation, will test this determination even further", he added.

During three-day stay in Pakistan the World Bank
President and members of his delegation met President General Pervez
Musharraf and Prime Minister Shaukat Aziz, besides ministers and
senior officials of various ministries.

The Bank also issued a country update on Pakistan
explaining current economic and social situation. It says Pakistan's
social indicators still lag behind countries with comparable per
capita incomes. "Poverty remains a serious concern in
Pakistan," the Bank observed in its country update. According to
the rebased GDP numbers, the per capita income comes to $ 720; poverty
rates, which had fallen substantially in the 1980s and early 1990s,
started to rise again towards the end of the decade. Though complete
data from the recent Integrated Household Survey is not yet available,
it is evident that a large segment of the population lives in poverty.
More importantly, differences in income per capita across regions have
persisted or widened. Poverty varies significantly among rural and
urban areas and from province to province, from 24 percent in urban
Sindh to 51 percent in rural Sindh.

The Bank update maintained that Pakistan has grown
much more than other low-income countries, but has failed to achieve
social progress commensurate with its economic growth. Access to
sanitation in Pakistan is 23 percent lower than in other countries
with similar income. The educated and well-off urban population lives
not so differently from their counterparts in other countries of
similar income range. However, the poor and rural inhabitants of
Pakistan are being left behind, the report added. Maternal mortality
remains high at 450 per 100,000 live births. Gender gaps remain in
schooling, largely due to the rural areas where only 22 percent of
girls above age 10 have completed primary level or higher schooling as
compared to 47 percent boys.

The World Bank delegation held a meeting with the
Pakistani team led by adviser to prime minister on finance, revenue,
economic affairs and statistics, Dr. Salman Shah. NAB Chairman Lt.
Gen. Munir Hafeez, Minister of State for Economic Affairs Ms. Hina
Rabbani Khar, Minister of State for Finance Omar Ayub Khan, Auditor
General Younus Khan, NRB Chairman Daniyal Aziz and senior officials
from ministries of Finance, Law and EAD participated in the meeting.

The adviser gave an overview of various structural
and policy reforms, including police, judiciary and civil services
aimed at good governance and eradication of corruption. The transfer
of power at local level by way of devolution programme, including
capacity building and human resource development also came under
discussion. The NAB Chairman highlighted anti-corruption strategy and
gave details of the money recovered from bank defaulters and others.
He asked the WB president to help Pakistan recover money siphoned off
abroad by some Pakistanis through illegal means.

The NAB Chairman also highlighted the role of his
organization to create awareness and eradicate corruption. A
transparent procurement policy has been devised to apply on all public
sector procurements uniformly, NAB Chairman informed the visiting
World Bank team.

He further informed about curbing money laundering,
saying that anti money laundering law is under process and will be
submitted to the appropriate forum for approval soon.

Assuring the bank's help, Paul Wolfowitz stated
that the World Bank would assist in any way to stop corruption and
assist Pakistan recover money sent abroad through illegal means.

Explaining salient features of the devolution
programme, NRB Chairman Daniyal Aziz said, although the system is
tantamount to upsetting the balance of status quo, it had empowered
powerless as well as women by providing relief to people at the
grassroots level. He asked multilateral donor agencies, including the
World Bank, to support the devolution plan. Dr. Salman Shah added,
"we are passing through a transitory phase and we are hopeful
that the devolution will have firm roots with the passage of
time."

Stressing the need to develop infrastructure in
Pakistan with the help of multilateral entities, including the World
Bank, Dr. Salman Shah said, "River Indus is a lifeline for
agriculture in the country and its potential can be exploited through
Second Indus Basin initiative with the help of the World Bank led
consortium outside the budget and lending programme of the bank".

The visit of World Bank president Paul Wolfowitz's
to Pakistan is significant. The World Bank chief, whose visit came
early in his tenure, which began in June, said he would be able to
learn more about the impact of reforms and the present state of the
country's socio economic development. He will also assess how the Bank
can further improve its support programme.

An important observation made by Mr. Wolfowitz is
that the country is facing challenges in terms of sustained growth and
ensuring equitable distribution of growth benefits to the poor. This
would clearly indicate that the emphasis being laid by the bank is to
sustain the momentum of growth. The Bank has enhanced its assistance
for infrastructure projects in such key areas such as water and power,
and this should help in this regard. The emphasis on economic growth
being pro-poor is also quite evident. Human development indicators are
low and greater effort is needed for the acceleration of social sector
development. The reduction in the level of poverty should continue to
receive high priority.

The World Bank has played a key role in the
country's economic progress over the years. The fact that it has
enhanced the level of its annual assistance shows the interest of this
important institution in not only overall economic growth and
development, but also in the welfare of the people.

After achieving macro economic stability, the
country's economy has been on the path of high growth for the last
three years. People expect the fruits of this economic progress to
reach them in larger measure. The challenges of poverty reduction,
creation of employment opportunities, and provision of better
education and health should be faced with greater determination. The
support from multinational institutions like the World Bank in meeting
these challenges is timely and encouraging.